what can I do to protect my wife

[byrne.l]

Hi,

I have personal debts amounting to £22,000+. I separated from my wife in Sept 2006 and signed the over to her last year. This was in recognition of the fact that she used part of her inheritance to pay the deposit and that she has paid the mortgage by herself since June 2006. The debts I have run up are due to several periods of unemployment and my problems with managing money, both during and after the separation. We did not formalise the separation process at the time as I moved away but we are now keen to start the divorce process.

I have been advised by a debt management company that the bank will attempt to seize any equity that I may have had in order to clear one of my debts.

Is this correct and if so, what can I do to protect her? I've put her through enough and I don't think she deserves to be penalised or lose the house because of my spending.

I currently live in Scotland, so I understand that I would have to enter into a Trust Deed agreement. The company has asked me to find out how much equity I had in the house at the time of my departure.

Although we had no formal agreement about the fact that she paid the deposit and would therefore have a greater equity claim, we made a verbal agreement, which I wish to uphold.

What advice can you offer? If it turns out that the bank would go after the house, then what are my alternatives please?

Thanks

[MelanieGiles]

Hi byrne and welcome to the forum

I also put together Scottish Trust Deeds, and if you have signed over your interest to your wife last year, and this was subject to a matrimonial consent order then this will be difficult for any creditor to challenge.

If there is no formal consent order, and you are still listed on the deeds of the property, you should not seek to transfer any equity to her now - but she will be given credit for the deposit monies she paid if she can produce bank statements confirming this to be the case.

[byrne.l]

There is neither a matrimonial consent order (whatever that is) nor a deed of separation, and my name is no longer on the deeds. My wife has since remortgaged the property in her name. Can you clarify further please? Thanks

[Reviva UK]

Hi
melanie has been away for the weekend but will be back on the forum tomorow nodoubt

[ianmillington]

It is a somewhat complex issue that will depend to a large degree on the big picture. For example, I note your wife paid the deposit and the mortgage since June 2006. If the house was bought a long time ago and you paid the mortgage throughout that time then you could have had a significant interest in the property at the time you transferred it.

I would recommend you consult an IP or Insolvency Lawyer on this issue.

Ian

[MelanieGiles]

If you propose a Trust Deed in Scotland the transfer of this asset will have to be investigated and the IP acting for you will have powers to trace a transaction at undervalue if you signed over property to your wife for less than full value.

As Ian says, a chat with an IP who is familiar with Scottish Insolvency is probably a good step forward.

[byrne.l]

We purchased the house in 2002. The only reason my name was added to the mortgage was because despite the fact that my wife had the deposit (it was part of her inheritance, which is why I am loathe to pursue this) I was unemployed for well over 12 months during the time I lived at the house.

When I was working, my earnings were sporadic and often comparatively meagre, as I worked for a number of different agencies. It was her wages which were used to pay the essentials, such as the mortgage, because she earnt more and has never been out of employment.

I have only recently secured a permanent full time position (for the first time in 4 years) with a move to Scotland late last year. Therefore, my contributions to the household income etc were small.

[byrne.l]

PLEASE NOTE: omission from above post. Although she had the deposit, the lender wouldn't allow her to take the mortgage on by herself, as at the time she didn't earn enough and was on a fixed term contract. The irony is that she secured a permanent position and increased salary less than six months later, and as her wages were consistently formed the greater part of our household income, right up until I left, she effectively paid the mortgage.

She has copies of bank statements going back 7 years, so I know that she has the evidence to confirm this.

[MelanieGiles]

The fact that your income was needed to assist her securing the mortgage would be sufficient to demonstate some form of beneficial interest I am afraid.

[Jo Rolland]

Could you advise how much deposit your partner paid and how much equity is currently in the property?

[byrne.l]

She paid 25% of the asking price plus all legal fees. I guess there's about 60K equity in the house. It's undervalue because it needs quite a lot of work doing to it.

[Jo Rolland]

Did you and your wife own another property previous to this one? How long were you married for?

[byrne.l]

We split up just before our 6th wedding anniversary and no, we didn't own any other property. We couldn't have bought the house without her inheritance. I didn't have any capital of my own. We met abroad and I'm not from the UK.

[Jo Rolland]

I don't think your situation is black and white. I think you should speak to someone in Scotland who can advise you on your options.